All Forum Posts by: Mike Carstens

@Jay Hinrichs. Here in Minnesota, snow and ice is a very real issue to deal with. The Tonneau type cover that runs in rails would be a real pain all winter long. Make it like a Suburban or Expedition to catch my attention.

@David Dachtera

What I do find out here should not impact taxes or depreciation in any way if we can even accomplish it.  Hopefully Simon W. has a solution.

@John Thedford,

Hey John,  

Yes, I believe that a separate spreadsheet will work.  As we move forward, I was just thinking that we could save a lot of paperwork by having the accounting program accurate.  It sounds like it may not be feasable though.  I kind of get a kick out of the description of what a balance sheet is (a financial snapshot of the health of your company) but then have the rules of no you cannot have the actual value of your property listed on your balance sheet.  Ha ha ha wow.  Gotta love it :-)  Not really sure what good it would be then.  Maybe I am missing something obvious.

@Simon W.

That is not the answer I want to hear!  LOL.  Seriously, I do very much appreciate you taking the time to respond.  I agree that depreciation would be off of the purchase price and definitely not off of the appreciated value.  I am not looking to alter the taxes in any way, but instead to give a more accurate snapshot of the financial state of the business.

My accountant mentioned that if I insisted we could add a line to the long term assets that would depict the appreciated value, but then we would need to also add an offsetting line in the liabilities so that we would not "screw things up".  Have you ever seen something like that?  Do you have any advice or suggestions along that line?

Thank you!

Mike

We are finally getting our business computerized and are running into a glitch.  

Scenario - 

Purchase a building for $70,000

Initial improvements $25,000

New value $145,000

Refinance at 75% of $145,000 = $108,750 mortgage

The problem that I am running into is that I am showing an long term asset value of $70,000 + $25,000 = $95,000 but an offsetting long term liability value of $108,750.  

Each time that I do this it makes me look more and more risky.  The properties also appreciate normally over time, so this property 10 years from now will show 10 years of depreciation on it lowering the value even more when in reality the value will most likely have appreciated greatly.

I understand that the book value of the property is already entered and is standard, but it is failing miserably to give a true and accurate snapshot of the company's health.  

How can I incorporate a proper value - say the latest real estate appraisal- into the balance sheet for each property?

If this has already been covered, please forgive me and send me to the right area.

Thank you!

Mike

@Cooper Bert  Thank you!  This is a great list!  My wife and I have been discussing this very thing.  I just copied and printed your list so that we can add it to our next planning session.  :-)

I did just chat with Xero to see if they had a downloadable version or what the benefits of being cloud based actually are.  They do not have a downloadable version.  The only benefit that they could come up with was that I could access my accounting program from multiple devices and not just from my office.  This is not an issue for me as we do all of our accounting from a single laptop computer and can take it with us anywhere we go and can access the internet with it at any time through a portable hotspot if we need it/want it.

We are looking for a software program.  We are currently using Excel to manipulate our numbers into income statements and balance sheets and such, but my wife does not use the program, so it is on my shoulders.  She purchased Quicken thinking that it would work as our accounting program, but is now disheartened and getting frustrated with it. 

I personally would like a program  that would give some management extras like reminders of "special" events like lease dates, or follow up reminders to do inspections, or maintenance reminders.  She wants nothing to do with an online program and cannot understand why anybody would trust their accounting program to be on the internet.  I must admit, I do not understand the advantages of having it online.  All that I see are disadvantages.  Maybe I just need to be schooled in that area?  We have a little over 40 units.  We mostly buy and hold, but do some buy and sell also.  Any suggestions?  I appreciate any input.  Thank you!